CP 1109, LLC VS. CONTINENTAL MOTORS, INC. (L-4837-13, CAMDEN COUNTY AND STATEWIDE)

New Jersey Superior Court Appellate Division·Decided August 29, 2018·No. A-0870-16T4·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."

Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-0870-16T4

CP# 1109, LLC, a Delaware LLC,

Plaintiff-Appellant, and MARTIN E. O'BOYLE, Plaintiff, v.

CONTINENTAL MOTORS, INC., a Delaware Corporation, and MATTITUCK SERVICES, INC., f/k/a TELEDYNE MATTITUCK SERVICES, INC., a Delaware Corporation,

Defendants-Respondents.

Argued May 10, 2018 - Decided August 29, 2018

Before Judges Simonelli, Rothstadt and Gooden Brown.

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No.

L-4837-13.

Jonathan R. O'Boyle argued the cause for appellant (The O'Boyle Law Firm, PC,

attorneys; Jonathan R. O'Boyle, of counsel and on the briefs).

Frank J. Vitolo argued the cause for respondents (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Frank J. Vitolo, of counsel and on the brief; Thomas M. Kenny, on the brief).

PER CURIAM In 2015, plaintiff CP#1109, LLC filed an amended complaint against defendants Continental Motors, Inc. (CMI) and Mattituck Services, Inc. (Mattituck), alleging that CMI's defective engine cylinders caused damage to plaintiff's single engine airplane after they were installed by Mattituck, CMI's authorized service center. Plaintiff asserted causes of action for breach of express warranty, breach of contract, and violations of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the Magnuson- Moss Warranty Federal Trade Commission Improvement Act (MMWA), 15 U.S.C. §§ 2301 to 2312.1 After a five-day trial conducted from May 5 to 12, 2016, the jury returned a verdict in favor of defendants. Plaintiff now appeals from the conforming final judgment entered on July 13, 2016, arguing reversible trial errors consisting of the admission

1 Plaintiff's amended complaint replaced its original nine-count complaint filed in 2013 and sounding in products liability. The trial court granted plaintiff's motion to file an amended complaint after granting defendants' motions for summary judgment on plaintiff's products liability claims.

of a spreadsheet as a business record, confusing jury instructions, an erroneous jury verdict form, the omission of an adverse inference instruction, and cumulative error. Plaintiff also argues error in the imposition of taxed costs following the verdict. We have considered these arguments in light of the record and applicable legal principles. We reject each of the points raised on appeal and affirm.

We recount the facts relevant to this appeal. CMI is a manufacturer of reciprocating engines for general aviation aircrafts. The engine at the heart of this case was manufactured by CMI and ultimately installed in the airplane sold to plaintiff in 2008. Plaintiff purchased the airplane used. In November 2010, plaintiff contacted CMI's customer service team to report a cracked crankcase in the engine in need of repair. CMI recommended sending the damaged engine to Mattituck, CMI's distributor and repair facility located in New York. Plaintiff arranged for Albatross Air, a company in West Virginia where the airplane was located at the time, to remove the engine from the airplane and ship it to Mattituck. Once Mattituck received the engine, they repaired the crankcase and replaced two of the engine's cylinders with new cylinders manufactured by CMI and covered by CMI's cylinder warranty. The repaired engine was then shipped back to

Albatross Air, which reinstalled the engine and returned the airplane to plaintiff.

Subsequently, on September 27, 2012, CMI was notified that an aircraft in Nevada was grounded after the engine, which was manufactured by CMI, overheated. A subsequent investigation of the coolant in the engine revealed that the cylinders were contaminated with casting sand from the factory during the manufacturing process. CMI immediately notified the Federal Aviation Administration (FAA) and instituted remedial measures that were later approved by the FAA,2 including reviewing manufacturing records to determine what cylinders were potentially affected in order to conduct inspections. As a result of that review, CMI identified fifty-five potentially affected cylinders, including plaintiff's. Some of the fifty-five cylinders were in CMI's inventory, but some, like plaintiff's, had been shipped to distributors and were already in the field. After conducting some inspections, CMI determined that not every part was affected. Rather, some parts had a small amount of sand and some parts had no sand at all.

2 In response to CMI's notification, the FAA concluded that the investigation "indicated the deficiency was not deliberate or intentional . . . nor was there a lack of competency." Moreover, CMI's remedial actions "demonstrated a constructive attitude" towards compliance.

Because CMI did not sell directly to consumers, in order to inspect the potentially affected cylinders in the field, CMI conducted an investigation, which involved a lengthy process of identifying, locating, and contacting the purchasers. The first step in the process was to locate the serial numbers of the affected cylinders and cross-reference those numbers with the sales orders to determine which distributors received the cylinders. Then, CMI had to contact the distributors to ascertain the identity of the ultimate purchaser. Once CMI obtained that information, CMI could then contact the purchasers directly.

In conducting the investigation, CMI's customer service team developed and maintained a spreadsheet used to track the serial numbers of the affected cylinders, the distributors, and, once identified, the ultimate purchasers. The spreadsheet listed any contact CMI had with these individuals or entities. According to the notations on the spreadsheet, CMI emailed Mattituck to determine who purchased the two cylinders Mattituck had placed in plaintiff's airplane engine. Mattituck identified Tim Kearns of Albatross Air as the purchaser. The spreadsheet also indicated that on November 5, 2012, CMI contacted Kearns who identified CP#1109's owner, Martin O'Boyle,3 as the owner of the airplane.

3 Originally, O'Boyle was a named plaintiff in the complaint. However, the trial judge dismissed O'Boyle from the case on the

Additionally, the spreadsheet noted that CMI contacted Chip Bonner from Southeast Aero Services, Inc. (Southeast), who stated that O'Boyle's airplane was located at his facility in St. Augustine, Florida.

Despite CMI's efforts to identify and notify purchasers, plaintiff claimed it was never notified by CMI and first became aware of the problem on or around January 16, 2013, when Bonner conducted an annual inspection of the aircraft and reported that the engine's water pump was running hot, causing the engine to overheat and rendering the aircraft unsafe to fly. Additionally, plaintiff claimed that after the airplane was returned from Mattituck in 2011, there were problems with the engine, including overheating and lack of power, which conditions progressively worsened. Plaintiff requested a new engine from CMI and incidental costs for having the plane grounded. CMI responded that pursuant to its "component cylinder warranty," it would only be responsible for repairing or replacing the cylinders and components affected by the cylinders, and was not required to provide plaintiff with a new engine. CMI offered plaintiff a $30,000 credit towards either a rebuilt engine, at a cost of $51,906, or a new engine, at a cost of $60,991. Plaintiff rejected the offer and reiterated

last day of trial, ruling that he had "no separate interest" or cause of action in an individual capacity.

its demand for a new engine at no cost, plus consequential damages. After CMI refused, plaintiff sued.

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